A
loan is a type of debt. Like all debt instruments, a loan entails
the redistribution of financial assets over time, between the lender
and the borrower.

Home Loan

As the name suggests it’s the loan taken from bank or any
institution for purchasing or constructing a home

Every year, misinformed homebuyers, often first-time purchasers or
seniors, become victims of predatory lending or loan fraud

Where to find home loans

There are so many home loans on the market these days with an
increasing variety of rates, fees and features that it really
bewilders the borrower to decide upon so many factors before
applying for a home loan but somewhere there is a loan that best
suits your circumstances on which one has to really work hard.
The main challenge is to look beyond interest rates to the
features that a home loan offers. Often there is a trade off
between interest rate and flexibility. Make sure the loan suits
your circumstances and the way you want to pay it off:

When you get a home loan, you should try to pay off that loan as
early as possible. Obviously, you don't have any real equity in
the house as long as you're just paying interest. These loans are
set up in these ways , that you're paying little more than
interest for the first several years. In other words, if you get a
30-year loan, you can make three or four years of payments and end
up only having a few hundred dollars worth of equity in your
house. That's the way the loans are designed. These loans are
designed to extract as much money as possible from your pocket
over the life of the loan.

What you should do is start paying off this loan early. You can do
that by sending extra money to the mortgage company, or by making
your payments with greater frequency. For example, instead of
sending $500 once a month to your mortgage company, you might send
$250 every two weeks. It does makes a lot of difference because
you're avoiding interest on the money for that additional two
weeks.

If You are far better off, of course, making a payment that is
larger than $1000. So, if you can afford to, send in $1200. Or
maybe even like $2000. This additional $1000 payment may probably
save you $20,000 over the life of the loan. This way you can save
a lot on paying extra interests on your Home loans

Beware of cheats:-
Some people may not be aware of the extremely dishonest practice
by mortgage companies. Here's how they trick consumers and take
their money without paying down the actual principle balance of
the loan:

Let's say your monthly payment amount is supposed to be $2000. And
suppose that's $1800 of interest and $200 of principle. But
instead of sending $2000, you think of sending $2500. to save some
money down the road. In a normal sane world, you would suppose
that $1800 goes to pay interest, $200 goes to principle, and then
the extra $500 that you sent should also go to pay down the
principle. But that's not the way that mortgage companies think
about these things. That would be too unprofitable for the
mortgage companies. They devise a system to extract more money
from you even though you're trying to pay down the balance. They
will take that extra $500 you've paid, and instead of applying
that to your principle, they apply it as a pre-payment of your
next month's interest.

Instead of using that $500 to pay down your principle, they will
it as a prepayment against the next month's interest. In other
words, even if you've sent them a $2500 check, you haven't gotten
any real credit whatsoever for the extra $500 you've sent in terms
of principle. According to their books, you've just prepaid part
of next month's payment. And of course, if you pay extra the next
month, they will apply that to the subsequent month.

To sum up ,It's possible to get home loans with interest rates
discounted by up to half a percentage point lower than the
standard variable rate. The big banks and some smaller lenders
offer a package of discounts and bonuses to those who conduct all
their banking with them.